Pepco Energy Services offers customers $20 rebates on water heaters with a 0.93 Energy Factor or better. There is also a limited-time Maryland rebate available for up to $450 for installing electric heat pump water heaters. Finally, through the federal Residential Energy Efficiency Tax Credit, you can get a tax credit equal to 30 percent of the cost of an ENERGY STAR water heater for up to $1,500.

If you're looking for other ways to lower your water heating costs, you may want to consider adding a solar water heater to your roof, which will preheat water year round before it enters your water heater. This ultimately lowers the total amount of energy needed to heat the water. Right now, Maryland offers a Solar Energy Grant Program covering up to $2,500 or 30 percent of the system's cost. These systems are also exempt from Maryland property tax and eligible for a federal tax credit equal to 30 percent of the system costs.